Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
68 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
44
Government-backed loans issued
Default rate
17.6%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$20.6M
Avg loan size
$469K
Participating lenders
21
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 68/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Average Net Income) disclosed — unable to validate ROI against $193K-$2.1M investment range
- 02HIGHParent company litigation pattern: FTC action against Signarama affiliate for earnings claims, plus multiple state consent orders (Maryland, California) against related brands for regulatory violations
- 03MINORSlow unit growth (7.7% YoY) with only 84 units suggests market saturation or franchisee underperformance in coworking/office space sector
- 04MINORRoyalty floor of $1,500/month ($18K annually) creates high breakeven burden on locations generating below $200K revenue
- 05MINORWide investment range ($193K-$2.1M) indicates inconsistent unit economics and unclear cost structure transparency
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.